Co-op Laws in Cuba Are Seen as Progress

Co-op Laws in Cuba Are Seen as Progress
By DAMIEN CAVE
Published: December 11, 2012

MEXICO CITY — The Cuban government authorized a wide range of co-ops on Tuesday, allowing workers to collectively open new businesses or take over existing state-run businesses in construction, transportation and other industries.

The new laws published Tuesday are the latest step in a slow, fitful process of opening Cuba’s economy to free-market ideas. The latest announcement calls for the creation of more than 200 co-ops as part of a pilot program. If it grows, analysts said, the experiment could do more for economic growth and productivity than earlier efforts to allow for self-employment, or to reform agriculture.

Co-ops that are run independent from the government could shift a large portion of the island’s economy to free-market competition from government-managed socialism, analysts contend, a change from earlier co-op efforts within state-run agriculture.

“The potential is large,” said Richard E. Feinberg, a professor of international political economy at the University of California, San Diego. “The Cubans are looking for something in between the old state-owned enterprise and a pure free market. Cooperatives are an answer, so looking forward, they could play a significant role.”

1. Cuba legalizes business co-operatives

Communist-run Cuba legalized non-agricultural co-operatives on Tuesday as the state continued to pull back slowly from its centrally planned economy in favour of private initiative and market forces.

The move was just the latest reform under President Raul Castro, who wants to transform the country’s Soviet-style command economy into one more in line with Asian Communism where political control remains absolute, while allowing more space for the private sector.

Mr. Castro’s reform push began after he took over ruling the Caribbean island from his ailing brother, Fidel, in 2008.

“The initial stage calls for the establishment of more than 200 associations of this kind (co-operatives) across the country, in sectors such as transportation, food services, fishing, personal and domestic services, recycling and construction and production of construction materials,” the Communist Party daily, Granma, said on Tuesday.

The newspaper said that the co-operatives would operate on an experimental basis through 2013, before becoming more generalized.